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Frontline Ltd (FRO)
NYSE:FRO
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Frontline
(NYSE:FRO)
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Rating:78Outperform
Price Target:
$24.00
â–²(9.39% Upside)
Frontline's strong financial performance and positive technical indicators are the most significant factors contributing to its overall score. The company's robust cash flow and liquidity position, along with a favorable earnings call, further support the stock's attractiveness. However, valuation concerns and external market challenges slightly temper the overall outlook.
Frontline (FRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.12B
Dividend Yield4.92%
Average Volume (3M)2.35M
Price to Earnings (P/E)21.7
Beta (1Y)0.57
Revenue Growth-5.33%
EPS Growth-59.96%
CountryUS
Employees85
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.35
Shares Outstanding222,622,900
10 Day Avg. Volume1,931,142
30 Day Avg. Volume2,347,806
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)1.35
Price to Sales (P/S)1.54
P/FCF Ratio-17.66
Enterprise Value/Market Cap1.32
Enterprise Value/Revenue3.56
Enterprise Value/Gross Profit10.07
Enterprise Value/Ebitda8.02
Forecast
1Y Price Target
$21.74Price Target Upside-0.91% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Frontline Business Overview & Revenue Model
Company DescriptionFrontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2021, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Hamilton, Bermuda.
How the Company Makes MoneyFrontline generates revenue primarily through the shipping of crude oil and refined products via its fleet of tankers. The company operates under a chartering model, where it leases its vessels to oil and gas companies for specified periods, either on a time-charter or spot-charter basis. Time charters provide a stable, predictable revenue stream as they involve long-term contracts, while spot charters can yield higher rates based on current market conditions. Additionally, Frontline may also engage in contracts with major oil companies and trading houses, which further diversifies its revenue sources. The company's earnings are influenced by factors such as global oil demand, shipping rates, and operational efficiency. Strategic partnerships with key players in the energy sector also contribute to its competitive advantage and financial performance.
Frontline Earnings Call Summary
Earnings Call Date:Aug 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 28, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive overall outlook, driven by strong financial performance, increased TCE earnings, and substantial cash generation potential. However, challenges in achieving expected TCE rates and uncertainties in global trade policies present areas of concern.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Frontline reports a profit of $77.5 million or $0.35 per share and an adjusted profit of $80.4 million or $0.36 per share in Q2 2025. The adjusted profit increased by $40 million compared to the previous quarter.
Increased TCE Earnings
Total TCE earnings rose from $241 million in the previous quarter to $283 million in Q2 2025 due to higher TCE rates.
Strong Liquidity Position
Frontline maintains a strong liquidity position with $844 million in cash and cash equivalents as of June 30, 2025.
Substantial Cash Generation Potential
Frontline has a cash generation potential of $648 million or $2.91 per share, which could increase by about 64% with a 30% spot market increase.
Positive Market Trends
The compliant tanker fleet sees improved utilization, and global oil demand growth is expected to continue with projections of 105.4 million barrels of consumption by December.
Negative Updates
Underwhelming TCE Rates
While TCE rates increased, they were somewhat short of expectations, with VLCC fleet achieving $43,100 per day, Suezmax $38,900 per day, and LR2/Aframax $29,300 per day.
Challenges from Sanctioned Markets
The parallel tanker market continues to challenge compliant fleets by stealing margins, affecting overall market dynamics.
Uncertainty in Global Trade Policies
Trade policies affecting crude sourcing add uncertainty, despite some positive shifts in compliant crude imports.
Company Guidance
During the second quarter of 2025, Frontline plc reported a profit of $77.5 million or $0.35 per share, and an adjusted profit of $80.4 million or $0.36 per share, marking an increase of $40 million from the previous quarter. This improvement was primarily driven by higher Time Charter Equivalent (TCE) earnings, which rose from $241 million to $283 million. The company's TCE rates for the quarter were $43,100 per day for VLCCs, $38,900 per day for Suezmax, and $29,300 per day for LR2/Aframax fleets, with booking rates for the third quarter already showing a slight decline. Frontline's balance sheet remains robust with $844 million in liquidity and no meaningful debt maturities until 2030. The average cash breakeven rates for the next 12 months are estimated at $28,700 per day for VLCCs, $22,900 per day for Suezmax, and $22,900 per day for LR2 tanks. Operational expenditures, including dry dock costs, were recorded at $8,700 per day for VLCCs, $8,900 for Suezmax, and $7,600 for LR2 tankers. With a fleet of 80 vessels, Frontline's cash generation potential is estimated at $648 million or $2.91 per share, with a potential 64% increase if spot market rates improve by 30%.Frontline Financial Statement Overview
Summary
Frontline demonstrates strong profitability and efficient cash flow management despite a decline in revenue. The company maintains a stable balance sheet with manageable leverage, but the decrease in revenue and return on equity warrants attention. Overall, Frontline is in a solid financial position with opportunities for growth and improved shareholder returns.Income Statement
Frontline shows strong profitability with a solid EBIT margin of 32.8% TTM and a reasonable net profit margin of 18.3% TTM. However, revenue has declined by 7.3% in the TTM period compared to the previous year, indicating potential challenges in revenue generation.75
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 1.58 TTM, indicating leverage is being managed, but still presents some risk. The equity ratio is stable at 37.9%, showing a balanced asset financing structure. However, the return on equity has decreased to 14.9% TTM, suggesting reduced shareholder returns.70
Positive
Cash Flow
The cash flow statement is robust, with a significant improvement in free cash flow from negative to $686 million TTM, showing strong cash generation ability. The operating cash flow to net income ratio is healthy at 2.02, indicating efficient cash generation relative to earnings.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.90B | 2.05B | 1.79B | 1.43B | 749.38M | 1.22B |
| Gross Profit | 671.74M | 1.04B | 761.43M | 481.00M | 30.61M | 536.70M |
| EBITDA | 842.88M | 1.15B | 1.06B | 725.83M | 217.24M | 628.35M |
| Net Income | 348.05M | 495.58M | 656.41M | 475.54M | -11.15M | 412.88M |
Balance Sheet | ||||||
| Total Assets | 6.14B | 6.22B | 5.88B | 4.78B | 4.12B | 3.92B |
| Cash, Cash Equivalents and Short-Term Investments | 438.42M | 417.56M | 315.75M | 490.81M | 115.51M | 177.36M |
| Total Debt | 3.67B | 3.75B | 3.46B | 2.37B | 2.37B | 2.20B |
| Total Liabilities | 3.81B | 3.88B | 3.61B | 2.51B | 2.46B | 2.31B |
| Stockholders Equity | 2.33B | 2.34B | 2.28B | 2.27B | 1.65B | 1.61B |
Cash Flow | ||||||
| Free Cash Flow | 686.35M | -178.84M | -775.24M | 52.93M | -399.47M | -120.26M |
| Operating Cash Flow | 703.00M | 736.41M | 856.18M | 370.89M | 62.93M | 604.06M |
| Investing Cash Flow | 241.56M | -483.40M | -1.24B | -239.47M | -363.06M | -715.97M |
| Financing Cash Flow | -805.37M | -147.80M | 433.07M | 10.03M | 223.55M | 124.18M |
Frontline Technical Analysis
Neutral
21.94
Price Trends
21.05
Positive
19.43
Positive
17.49
Positive
Market Momentum
0.41
Positive
45.54
Neutral
32.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Neutral. The current price of 21.94 is below the 20-day moving average (MA) of 23.15, above the 50-day MA of 21.05, and above the 200-day MA of 17.49, indicating a neutral trend. The MACD of 0.41 indicates Positive momentum. The RSI at 45.54 is Neutral, neither overbought nor oversold. The STOCH value of 32.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FRO.
Frontline Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.12B | 21.66 | 9.93% | 4.92% | -5.33% | -59.96% | |
76 Outperform | $1.75B | 6.39 | 15.78% | 4.08% | -21.71% | -37.58% | |
75 Outperform | $2.87B | 7.65 | 12.13% | 2.84% | -34.54% | -42.46% | |
75 Outperform | $1.87B | 10.02 | 17.90% | 6.81% | -8.89% | 21.28% | |
72 Outperform | $2.32B | 9.79 | 12.61% | 7.37% | -22.01% | -54.34% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
51 Neutral | $4.11B | 1,531.44 | -0.38% | 2.59% | -2.78% | -105.22% |
* Energy Sector Average
FRO
Frontline
21.94
-1.59
-6.76%
DHT
DHT Holdings
11.45
0.37
3.34%
GLNG
Golar LNG
38.61
1.06
2.82%
STNG
Scorpio Tankers
54.33
-15.89
-22.63%
TNK
Teekay Tankers
49.07
-9.04
-15.56%
INSW
International Seaways
44.35
-4.30
-8.84%
Frontline Corporate Events
Frontline Announces Synthetic Options Grant and Exercises
Sep 18, 2025
Frontline plc, a company operating in the shipping industry, announced on May 27, 2025, the grant of 362,284 synthetic options to its management and employees. These options, which will vest over a three-year period and expire in 2030, are part of the company’s synthetic option scheme. Additionally, on September 8, 2025, a director exercised 44,000 synthetic options, and on September 12, 2025, the CEO exercised 110,000 synthetic options. These transactions reflect the company’s ongoing efforts to align management incentives with shareholder interests.
Frontline PLC Reports Mid-2025 Financials and Strategic Fleet Sale
Sep 17, 2025
Frontline PLC reported its financial results for the six months ended June 30, 2025, highlighting its fleet composition and recent strategic moves. The company announced the sale of its oldest Suezmax tanker for $36.4 million, expected to generate significant net cash proceeds and a gain in the third quarter of 2025. Additionally, Frontline is involved in ongoing legal proceedings initiated by FourWorld Capital Management LLC, which challenges past transactions related to Euronav NV. The company intends to defend itself vigorously against these claims.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.